01Feb10:17 amEST

I'm Sorry I Ruined Your Silver Party

Amid U.S. Dollar strength on top of more eyes on--and discussion of--silver than one can recall in recent memory, I elected to sell out of a silver miner long first thing this morning inside Market Chess Subscription Services. While I recognize the Reddit phenomenon may very well catapult silver and the miners much higher, trading with a crowd this full of retail money newly interested in markets and trading in general is not my preference for anything beyond extremely near-term moves. 

One aspect of this play from the WallStreetBets crowd perspective is that the silver market is a much, much larger market than small, heavily-shorted names like GME. In the case of silver, we are talking about a market well over $1.5 trillion, whereas GME was roughly $1 billion in market cap just before this national news story materialized.

Beyond that, the "paper ETF for precious metals" squeeze thesis has been known for a long time now in the finance world, well before the Reddit thesis. While Reddit certainly has brought it to light, I, again, suspect the Dollar strength here is being vastly underestimated in the near-term. 

Longer-term, I remain quite bullish on gold, silver, and most miners. The inevitable continued monetary debasement of the world's major currencies is one of several bullish factors for the metals. But in the very near-term, I would not be shocked to see this silver move punish some chases more swiftly than the likes of GME has. 

One position I am not selling into strength, just yet, is natural gas. Interestingly, the UNG ETF is up just as much as SLV percentage-wise, to virtually no fanfare. A nationwide cold front and snowstorms seem like obvious bull reasons for the move. 

But let us not forget that commodities have been hot in recent months and natty is ripe to catch up to its buddies. The bottoming pattern, highlighted on the UNG daily chart, below, implies this move is just starting. 

Weekend Overview and Analysi... Stock Market Recap 02/01/21 ...

 
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